Written Commentary
SOYBEANS
Fresh news over the weekend for beans was limited, and the market is near steady to start the week. The weekly close for beans last week was near the bottom of the weekly range, amid concerns that the US is missing out on China’s demand and a yield forecast from S&P Global at 53.8 BPA, slightly higher than the USDA number. The USDA will release its updated yield estimate in the September supply and demand report on Friday
SOYBEAN MEAL
The soymeal market is steady to start the week, with little in the way of weekend news to move the market significantly in either direction. China continues to shun US beans, and there is no reason to expect any trade progress with China until the Supreme Court rules on the legality of Trump’s tariffs. Interestingly, China’s August bean imports reached an all-time record high, which is unusual given that their crush margins are not particularly strong while they have made significant efforts to reduce meal usage in hog and poultry feed rations.
CORN
The corn market ended last week on a downbeat note as December corn was unable to move higher after hitting a 1 1/2 month high on Friday morning. Bearish news included the United Nations Food and Agriculture Organization raising world corn stockpiles by 9.6 million tonnes to a record high of 898.7 million tonnes, and S&P Global estimating corn yield at 189.1 BPA, higher than the USDA at 188.8. Most analysts are thinking the USDA will lower their yield in this Friday’s supply and demand report.
WHEAT
The wheat market struggled last week with large global supply acting like an anchor. The United Nations’ FAO raised global grain output in 2025 to a record high, up 3.5% year-over-year. However, world wheat output was slightly lower than last year, down 0.4% to 805.3 million tonnes, still a substantial number. Russian and EU prices remain weak, and APK-Inform raised Ukraine’s wheat production estimate to 21.9 million tonnes, up from 19.7 million last month.
CATTLE
The cattle complex closed near the lows of the week on Friday as long liquidation and profit-taking were the feature during the second half of last week. A poor weekly close may encourage additional liquidation this week as the strong upside momentum since early July has begun to fade. However, with cash prices near steady last week, retail demand holding up, and cattle supply tightness expected to continue, expectations are low that a long-term top has been reached.
HOGS
The hog market regained upside momentum on Friday and closed out the week by reaching new contract highs. Strength was partly due to China imposing duties on EU pork imports, which raises the odds that the US will see some additional demand. The technical breakout to the upside 2 weeks ago suggests prices may continue their bullish momentum. COT data showed speculative funds increased their net long position by nearly 10,000 contracts to a two-month high.
MILK CLASS III
October Class III milk finished with a very large weekly loss after falling to a contract low on Friday.
The USDA reported that summer temperatures continued to keep output low in many areas. However, colder temperatures in the northern part of the nation have a positive impact on cow comfort and lead to higher milk production.
ENERGIES
October Crude Oil is finding its way after OPEC+ agreed to a smaller increase in production than some had expected at their meeting yesterday. The group will ease its production restrictions by 137,000 barrels per day for October, smaller than the monthly increases of about 555,000 bpd for September and August and 411,000 bpd for July and June. This means that they have begun to unwind a second tranche of cuts of about 1.65 million bpd more than a year ahead of schedule. The group has already fully unwound the first tranche of 2.5 million bpd since April. However, OPEC+ production has not grown as quickly as the quotas have been lifted, due to limited capacity for some and the fact that some members were already producing above quota before the restrictions were eased.
October Natural Gas extended its recent recovery rally overnight to trade to its highest level since October 8. The market has shunted aside last week’s EIA storage report that showed a larger than normal injection. The Baker Hughes rig count showed US natural gas rigs in operation were down 1 rig to 118 last week. This was up from 94 rigs a year ago and above the five-year average of 109 but down from a peak of 124 on August 1. A warming trend in the lower 48 states over the next two weeks could bring some late season cooling demand in the south
DOLLAR INDEX
The USD index continued lower following the weak nonfarm payrolls data, which showed hiring stalled in August, reinforcing expectations that the Fed will cut rates in September.
COCOA
December Cocoa was lower overnight as the market continued to drift on expectations for lower demand and a decent mid-crop in west Africa. However, dry conditions in Ivory Coast and Ghana could start to raise concerns about the crop. The region has been experiencing seasonable dry pattern (in the midst of their rainy season) that been more severe and has lasted longer than normal.
COFFEE
December Coffee traded back and forth overnight inside Friday’s range. The market found support last month on a drawdown in exchange stocks in the wake of the 50% tariffs place on Brazilian imports into the US, but the trade is apparently waiting to see if the tariffs will hold.
COTTON
With US crop conditions falling slightly from 55% good/excellent as of July 31 to 51% as of August 31, we could see a modest decline in US production in Friday’s USDA Crop Production and supply/demand (WASDE) reports. Keep in mind the five-year average for August 31 is 44% G/E. The slow pace of export sales may also encourage the USDA to lower its 2025/26 export forecast.
SUGAR
October Sugar was slightly higher overnight after approaching July’s 2 ½ year low on Friday. Ample supply seems to be the theme, with Brazil’s production recovering from a slow start and expectations for strong crops out of India and Thailand this year after the good monsoon rainfall this season. Germany’s sugar industry association released its first harvest report of the season today, and it put refined sugar production from beets at 4.40 million metric tons, down from 4.63 million in 2024, a 4.9% decline.
PRECIOUS METALS
Gold futures hit fresh highs again after weak payrolls data out of the US cemented expectations for a September rate cut from the Fed. Payrolls rose by just 22,000, well below expectations of 75,000 while the unemployment rate was ticked to a four-year high of 4.3%.
Silver futures are higher, reaching their highest level since August 2011, as the weak nonfarm payroll report cemented hopes of a September rate cut from the Fed. Traders now await this week’s inflation reports.
Copper futures held steady amid outflows of copper in LME registered warehouses, a weaker USD, and data from China. Chinese imports of unwrought copper in August fell from July to 425,000 tons but rose from a year ago, while imports of copper concentrates climbed to 2.76 million tons, a four-month high.
EQUITIES
Stock index futures are higher as markets look ahead to inflation data out this week for more clues on the US economy following a weak nonfarm payrolls report on Friday. Payrolls rose by just 22,000, well below expectations of 75,000, while the unemployment rate was little changed, ticking higher to 4.3%, showing a substantial slowdown in job growth. Slowing price growth could add to expectations for a series of interest rate cuts from the Fed if inflation proves to be a lesser problem than initially feared, while a stronger reading could temper expectations for the amount of easing this year.
INTEREST RATES
Futures are little changed across the curve, apart from the 30-year bond, where the yield fell.
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